Taxes and the single nurse

[bchboy]

Hello all, I have just graduated and am waiting for boards and this has been bugging me for a while.

I am single, living in an apartment and plan on working as many hours as possible for the first two years in my present position and then do some travel nursing for about a year or so.

I want to pay off my credit cards/student loan, new truck, and then save a big chunk of change so I can buy my dream house within three years or so.

Without deductions, a plan or a sound strategy I am afraid Uncle Sam is going to rape me. Can anyone give me some advice on taxes and basic strategies to help achieve my goal?

Thanks in advance

Bchboy

[sunnyjohn]

Pre tax investments, 401(K), etc.

[Altra, BSN, RN]

Concentrate on paying off that consumer debt (car payment, credit cards) ASAP - the interest is not tax deductible, whereas student loan interest is. Also if you're going to stay in one location for 3-5 years, you might find it financially to your advantage to buy a home instead of renting.

Lots of variables to consider depending on your individual situation ... in general you'll want to make the most use of pre-tax dollars when choosing your benefits to reduce your taxable income, and pay down that debt.

[bchboy]

Great advice, sounds pretty simple, I need to get into pretax investments, pay down consumer debt, buy house.

I guess the hardest thing is money discipline.

[llg, PhD, RN]

Make sure you are taking full advantage of the benefits your employer offers.

For example, my employer offers "flixible health care spending accounts" that allow me to pay any medical bills with pre-tax dollars. It also includes over-the-counter stuff like aspirin, cold medicine, etc. Those kinds of savings can add up to a lot if you need dental work, buy glasses or contacts, etc.

Also, while I can understand that you may want to work extra shifts ... be careful not to over-committ yourself. Sometimes people work so much that they start getting sick a lot and/or become burned out. In the long run, the damage they do to themselves outweighs the benefits they got from the extra work hours.

llg

[chester427]

I second the 401k or 403b depending on whether your hospital is for profit or not. You can contribute $15000 this year into a 403b pretax, that should drop your tax bracket. Pay off the credit card with the highest interest rate. Unless you student loans are massive, I would take my time paying them off. You can take the interest off your taxes if you itemize. Remember to itemize if you can. Uniforms, stethoscopes, shoes are tax deductible. Also if you pay union dues. If you can now buy a small house or condo the interest is tax deductible and depending on where you live housing goes up. Ex. we bought a condo for $65000 sold it for $60000 because we had a house built and found out the same models are for sale for over $100k now. Hope this helps

[bchboy]

I second the 401k or 403b depending on whether your hospital is for profit or not. You can contribute $15000 this year into a 403b pretax, that should drop your tax bracket. Pay off the credit card with the highest interest rate. Unless you student loans are massive, I would take my time paying them off. You can take the interest off your taxes if you itemize. Remember to itemize if you can. Uniforms, stethoscopes, shoes are tax deductible. Also if you pay union dues. If you can now buy a small house or condo the interest is tax deductible and depending on where you live housing goes up. Ex. we bought a condo for $65000 sold it for $60000 because we had a house built and found out the same models are for sale for over $100k now. Hope this helps

Wow, I had no Idea that uniforms and the such were tax deductable. Man, I love this site.

Thanks for the info and any other ideas not mentioned is appreciated.

Bchboy

[mf1126]

Question regarding deductions--are things like my license fee, NCLEX fee, and fingerprinting fee also deductible? Anything else I should know about?

Thanks for the reminder about uniforms and equipment etc. I need to get in the habit of keeping all of my receipts!

Thanks for the info!

Michelle

[TheCommuter, BSN, RN]

I am a single 25 year-old without any dependents. However, I voluntarily choose to take home virtually the entire amount of my paycheck by claiming 9 deductions.

My tax deductions and write-offs are property taxes, traditional IRA contributions, 401(k) pre-tax contributions, student loan interest, and medical/dental expenses.

[llg, PhD, RN]

Be sure to read the guidelines regarding tax deductions carefully. Some of that stuff is only deductable if it adds up to a certain percentage of your annual income. In other words, if you only spend a little money on it, it's not deductable.

Save all receipts and take whatever deductions you are entitled to take ... but don't "bend the rules." The IRS is not an agency you want to mess with.

llg

[suzanne4, RN]

Question regarding deductions--are things like my license fee, NCLEX fee, and fingerprinting fee also deductible? Anything else I should know about?

Thanks for the reminder about uniforms and equipment etc. I need to get in the habit of keeping all of my receipts!

Thanks for the info!

Michelle

Anything that is required for you to be able to work in your profession is deductible, if you look at it in those terms. Even laundry costs for uniforms and socks are included, as well.

[co_gai_viet]

I am a single 25 year-old without any dependents. However, I voluntarily choose to take home virtually the entire amount of my paycheck by claiming 9 deductions.

My tax deductions and write-offs are property taxes, traditional IRA contributions, 401(k) pre-tax contributions, student loan interest, and medical/dental expenses.

What's the difference between claiming 9 vs 2 dedections, or vs any other number?